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India's restriction on cotton export to impact RMG sector
Apr '10
Restrictions on cotton exports in India brought cotton imports through Benapole Land Port to a standstill. During past six days, this port witnessed import of just 29,128 cotton bales.

This restriction has threatened Bangladeshi textile sector as it can affect the spinning mills in the country. It will lead to increase in the prices of yarn in Bangladesh and ultimately will take its toll on yarn exports.

From India, Bangladesh imports around 30 percent of its overall cotton import requirement. In the current cotton season, cotton exports of India witnessed boost due to strong demand from China and Bangladesh.

So far, about 60 percent of India's cotton exports have been shipped to China. The contract registration for cotton exports has been stopped from April 19, while export suspension order also came in effect from the same day and will be in effect till further notice.

India imposed restriction on cotton export with a purpose of holding on to the cotton harvested in the country as well as to alleviate domestic cotton prices, which have mounted up by over 25 percent from the month of October.

Bangladeshi garment industry will take a hit from this restriction as spinners will need to pay out more money to import cotton from other countries. Bangladesh requires 4 million cotton bales per year which it imports from the countries, including Uzbekistan, Russia, USA and India.

Fibre2fashion News Desk - India

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